Buying or selling a second-hand vessel is one of the most significant transactions in shipping. The process involves legal, technical, financial and regulatory steps that must be managed carefully.
1. Market Search & Shortlisting
Define your requirements — vessel type, DWT, age, flag, classification society, and budget. Your broker identifies suitable candidates from the sale market, including off-market opportunities.
2. Indicative Offer & MOA Heads
Submit a non-binding or binding offer. Once terms are agreed in principle, the Memorandum of Agreement (MOA) is drafted — typically on Norwegian Sale Form (NSF) or similar standard.
3. Deposit & Inspection
Buyer pays deposit (typically 10%) into escrow. Buyer arranges pre-purchase inspection — hull, machinery, class records, cargo history, and regulatory compliance (ISM, ISPS, MLC).
4. Due Diligence
Review class status, outstanding conditions, mortgages, liens, arrest status, and flag state requirements. Legal advisors check title and encumbrances.
5. MOA Execution & Amendments
Finalise MOA with agreed price, delivery window, place of delivery, and conditions. Common amendments cover inspection results, speed/consumption warranties, and free of encumbrances.
6. Delivery & Payment
On delivery date, buyer's team boards vessel for delivery survey. Balance of purchase price is paid, bills of sale exchanged, and physical possession transferred.
7. Flag Transfer & Documentation
Register vessel under new flag, update class records, transfer insurance, and notify all relevant authorities. Broker coordinates throughout.